CIO Roundtable Results in Cloud Breakthroughs | Article

A recent CIO Roundtable sponsored by Alsbridge, Inc. resulted in several breakthroughs on adopting and implementing cloud computing. Every IT executive in the room had two things in common: (1) a driving need to explore and leverage cloud solutions and (2) lack of a clear way to validate the cloud offerings in the market and execute the internal changes necessary to utilize them effectively.

The attendees represented IT executives from a broad range of industries such as insurance, consumer packaged goods, media/publishing and healthcare. They were in various stages of their cloud journey. Some had built “internal clouds,” others had executed discrete pilots for software-as-a-service (SaaS) solutions, one was engaged in the roll-out of an enterprise-wide cloud solution, while others were still in the information-gathering process. By sharing lessons learned and collaborating with their peers, the attendees developed action plans to overcome these challenges and take advantage of cloud computing in 2011.

Drive to explore the cloud services includes concern over “shadow clouds”

“The business is moving to cloud regardless of whether IT is ready,” stated one of the attending CIOs; and the majority of attendees concurred. As much as IT departments attempt to control the use of cloud services in their organization, it is a nearly impossible task.

Alsbridge has worked with organizations in the financial services space that operate highly controlled, highly secured environments that are unable to control the use of “shadow cloud” in their organization. When business executives responsible for revenue generation finds a SaaS or infrastructure as a service (IaaS) solution that can help them rapidly accomplish their business objectives – and all they need to do is enter credit card information to purchase it – they’ll do just that.

CIOs are justifiably concerned about the security, data privacy and regulatory issues the use of “shadow cloud” creates in an organization. As one roundtable attendee commented, “the controls and audit world is 10 years behind the technology.”

Further, the IT executives understand the difficulties they will face in synchronizing data flow between one cloud solution and the next as well as with their own internal systems. Faced with the need to meet the demand from the business for the value delivered by cloud solutions, IT executives are building internal solutions and investigating the rapidly expanding market of cloud services vendors.

Developing internal solutions – cloud or not cloud?

Several of the CIO attendees had built what they referred to as “internal private clouds,” but they were quick to acknowledge that these are not truly cloud environments. “We achieved an 80 percent reduction in the number of servers through virtualization and refer to it as our internal cloud, but we know that it’s not really a cloud solution,” stated one attendee.

While the results of such efforts are impressive, they do not constitute cloud solutions primarily because of the need for human intervention. They fail to meet the widely accepted NIST definition of cloud computing: “On-demand network access to a shared pool of configurable computing resources that is rapidly provisioned and released with minimal management or provider interaction.”

The CIOs generally agreed that their in-house virtualized environments still provide a better solution than they can find in the market. “We were better than the market a year ago, but now we’re ready to compare again,” stated one CIO.

Cloud service providers – in the cloud or on the runway?

The attendees all had a general distrust of the solutions pitched to them by the cloud service provider community. One of the attendees recently went through the roll-out of an enterprise-wide cloud services solution. The “cloud” that his organization purchased entailed over 100 different environments, lacked a service-oriented architecture (SOA), had firewalls between different data centers and was rife with data compatibility issues.

All of the attendees agreed they need a source for independent, unbiased advice on the capabilities of cloud service providers in the market. As one attendee put it, “Cloud pricing is not simple. It sounds simple, but it’s not.”

In much the same way as the early outsourcing advisory market evolved, buyers today need a cloud sourcing advisor. However, unlike the traditional outsourcing market, the cloud services market is not geared towards a six-month process for a documentation-heavy RFP process with site visits on both sides and a long contract negotiation. Depending on the cloud services provider, a buyer may or may not have an account executive. In many cases, there is little room for negotiating custom contract terms.

To begin engaging cloud service providers and begin building the business case for expanding an organization’s use of cloud computing, Alsbridge advises CIOs to begin running pilots with selected applications.

A CIO Roundtable attendee posed the question, “How do I avoid security risks, data integration issues, and unexpected spikes in total cost of ownership?” Simply put, no answer works for every company in every scenario – thus the need to develop a strategy using a repeatable process designed to get from Point A to Point B.

As the leading cloud sourcing advisory firm, Alsbridge has developed and executed a proven cloud sourcing methodology designed to guide an organization through the internal changes and external market interaction necessary to engage and leverage cloud solutions.

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